Senate debates higher profits tax on oil companies

[emad]

Source: AP

By H. JOSEF HEBERT

WASHINGTON (AP) — With gasoline prices topping $4 a gallon, Senate Democrats want the government to grab some of the billions of dollars in profits being taken in by the major oil companies.

Senators were to vote Tuesday on whether to consider a windfall profits tax against the five largest U.S. oil companies and rescind $17 billion in tax breaks the companies expect to enjoy over the next decade.

"The oil companies need to know that there is a limit on how much profit they can take in this economy," said Sen. Richard Durbin of Illinois, the Senate's No. 2 Democrat, warning that if energy prices are not reined in "we're going to find ourselves in a deep recession."

But the Democrats are going to have to overcome staunch Republican opposition to any new taxes on the oil industry. The five largest U.S. oil companies earned $36 billion during the first three months of the year.

Read more: http://ap.google.com/article/ALeqM5g8pZNJhU9yup14pmAsKngt5uDksAD9176M8O0

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A windfall tax on selective companies is illegal and unconstitutional.

I am no admirer of any GOP policies, whether energy-related, political or other.
But this Dem proposal is at best ill conceived and irrational.

America has become crude obese and motorists are whinging at the price of their gas guzzling greed. $4 a gallon is peanuts compared to the UK's $10, for example, or the EU-average of $8.50.

As for the US oil companies they have invested about the same amount in exploration, start-up costs and related upstream delivery as their overall profits during the last decade.

Democrats would be way better off negotiating their own energy policy on a one to one basis with the heads of energy companies.

Promoting punitive taxation solutions because of market fluctuations in global crude prices reeks of naivety.

[jimshoes]

1. Debate, we should be demanding

windfall taxes on these thieves.

[Xenotime]

6. Agreed. Make those fuckers pay for ruining America and the environment

[emad]

14. You'll be utterly screwed at the first attempt. Imagine what would

happen to your gas-guzzling fantasy lives if, say Chevron for the sake of an argument, or the lease-owners on whose land/territory the crude/LNG that Chevron pumps is sited, say "That's ot, we're shutting down production because of x, y or z reasons and stuff you Congress."

America has become utterly spoilt and self-centred in demanding cheap gas prices and punishment of the very corporations that enable them in their addiction.

[Dogtown]

2. Will not happen

Maybe after January, but our confused and indecisive legislators won't face it now. Just too scary...

[armodem08]

3. Why is it unconstitutional?

Please elaborate and provide the section of both the Constitution and U.S. Code that forbid a windfall profits tax.

[emad]

8. You can't single out half a dozen corporations for a punitive tax,

however much of a vote winner it might be at election time.

Bigoil lawyers have consistently won this round and I agree with their legal stance.

The real villains in this saga are the market makers who've made a killing on everything from the dotcoms,interest rate hikes, the stock markets, the currency markets, bullion and now crude.

Attempting to punitively tax the oil giants would land all the market profiteers in court and that would bring down Wall STreet.

[Nickster]

4. Nothing in the Constitution that says we must hand out welfare to corporations, so we can wipe out

that 17 billion dollars in welfare they receive every year without complaint right?

[emad]

9. Welfare? Nonsense. The same tax breaks in the oil industry

apply across the board to all commerce.

They are not individual to the oil industry .

Energy companies' investment in exploration and infrastructure over the last decade has been level with their profits.

Crude-obese gas-guzzling Americans are whinging and want retribution.

[Nickster]

11. You might want to do your homework. The oil industry is getting 17 billion to give them incentive to

pump oil when the price per barrel was low,now they get the money for what reason?

[emad]

13. The oil industry has spent $600 billion on exploration and other

upstream costs.


You will all be utterly fucked if they decide to close down operations to find new deposits pr develop existing ones.

Try running your 747s, or Hummers or boats on solar power, wind turbines or heat exchange pumps.

[dmosh42]

5. This isn't going to happen anyway.....

According to a recent speech by Benie Sanders(I-Vt), the oil industry spent 600 million in lobbying during the last ten years! Think about that amount for a minute. Think they haven't bought off Congress?

[ut oh]

7. The whole dilema w/ a windfall tax or removing the tax break

Is the oil companies are just likely to charge more for the oil.... So for the consumer it really won't make a difference.

I also don't see the CEO's negotiating anything honestly. They have all the cards so to speak and personally I don't think their morals are strong enough to do something good for society.

[emad]

10. It's not a question of morals. Huge investment surges in crude

are behind the price hikes.

OPEC isn't going to up crude production to lower gasoline prices just because a lot of gas-guzzling American whingers are complaining at paying $4 a gallon.

[gmpierce]

12. windfall hell

The last time our enlightened congress passed a windfall profits tax was in the early 80s. The oil companies that were supposed to be making this windfall were very small compared to Texaco, Conoco and the other big guys. There was an incredible mini-boom by these little guys. They were buying leases and doing test drilling and creating new reserves using their own money.

The tax that the DemoPublicans passed broke the back of these small entrepreneurs. When they went bankrupt, the leases they had signed were bought up cheaply by the major companies.

The bottom line is that when Congress passes a law, they have two goals: 1) Get a piece of the loot and/or 2) Do a favor for the big oil companies who own them.

If there is any chance that the rest of us will benefit, there is no chance that it will be passed.

[surf]

15. A tax on oil profits does nothing for me.

The only winner is the government who gets more tax revenue. I, as the consumer would probably pay more for gas because of it. Or worst case scenario, Oil companies would sell to other countries to avoid the tax.

Republicans take every opportunity to screw over the lower class. I'm hoping for better from the Democrats.